Online Shoppers Will Buy More If They See What Others Have Bought

It turns out that online shoppers are really just a bunch of copycats. According to new research, consumers are more likely to purchase items if information highlighting sales statistics from other customers accompanies product listings on websites. This news can serve as a vital resource for online retailers and small businesses looking to maximize online sales as the holiday season, and Cyber Monday, in particular, approaches.

"Households make decisions by following what they see their neighbors doing," said Qi Wang, associate professor of marketing at Binghamton University and author of the study, which appeared in the International Journal of Marketing Research. "People learn from their peers what to buy."

To prove this theory, Wang looked at user comments and sales statistics posted for 90 digital cameras on Amazon.com. The research found that camera sales were boosted when consumers found out that peers had also purchased the same model of the camera. According to Wang, this phenomenon can be attributed to "observational behavior," or the tendency of people to adopt the same habits and tendencies as peers. Surprisingly, however, lower sales numbers had little impact on the future sale of cameras. As long as shoppers could see that some people were buying the product, the volume of sales did not matter.

"It's good news for manufacturers who haven't had a lot of people buy their product," said Wang. "If it's a niche market just targeting a small group of consumers, they don't have to worry because there is no harm in releasing this type of information. What's most surprising is the interactions of word-of-mouth and observational learning. They strengthen each other."

This research can also serve as a vital tool aiding marketers when they craft their websites as it dispels the popular notion in retail that consumers will not want to purchase a product if it has a low rating from peers. Traditionally, many websites rely only on word-of-mouth feedback or customer reviews of products to help influence people's decisions to buy a product. By adding sales information to their websites, retailers can potentially experience a boost in sales from people shopping online who want to keep up with trends and what is popular.

"Negative word-of-mouth affects people more than positive word-of-mouth. This is not new," said Wang. "With our study, we are the first to show the influences of observational learning. This is very important to companies thinking about what types of information can be posted on their websites. Our study gives them the evidence."